Cheaper labor isn’t the main reason, reports Bloomberg. They note that labor is only 2.2% (about $5) of the iPhone’s hardware cost (estimated to be $224.80). The ability to scale the volume of labor, on the other hand, is a major factor. China’s Foxconn can rapidly hire up to a million workers during “iPhone season” and cut back to a few hundred thousand when iPhone production isn’t ramping up—something that would be much more difficult in America. Also, as most of the suppliers who make components for the iPhone are Chinese-based, and thus located within 50 miles of Foxconn facilities, iPhone components can be shipped cheaply and quickly to arrive at iPhone assembly facilities, something not possible if the iPhone was made in America.MG